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AFSCHRIFT LAW FIRM Thierry Afschrift Partner
Tel: +32 (0)2 646 46 36 Fax: +32 (0)2 644 38 00 Email: avocats@afschrift.com Website: www.afschrift.com
FIRM PROFILE These last years, a new trend emerged within the circles of international finance, more precisely the one concerning mechanisms related to Islamic finance.
In the same time, as always, questions arose concerning the possibility to actually apply such systems in modern finances and also as for the viability of these mechanisms in the actual legal and financial frame.
The credits linked to Islamic finance institutions all over the world are however of such an importance - they amount in thousands of billion dollars - that the subject always arouses an unquestionable interest.
Islamic banking is defined as ‘’A full service intermediary financial institution that abides by the Islamic law which is derived from Qur’an – the holly book of Muslims and Sunnah (the sayings and actions of the Holly Prophet Muhammad PBUH). The most prominent features of Islamic finance are interest-
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free banking – collection or payment of interest is not permissible and profit/loss sharing based financing.
Additionally, Islamic banks are co-governed by the Islamic-religious leaders (advisers) who identify the religiously permissible transactions – for instance it does not invest in; gambling, alcohol, armaments, tobacco, and pornography and so on and so forth’’. (Nawaz and Goj, 2013, p. 311).
Islamic finance is thus founded on the 5 following basic principles: - prohibition of interest; - prohibition of investment in illicit activities; - speculative prohibition of gambling and behavior; - asset-banking; - sharing of profits and losses.
Moreover, another important principle consists of the traceability of the credits, which must be constantly ascertained; in this way, the bank’s customer always
knows exactly where his money have been invested/ to what purposes it has been used.
The point is that, following the Islamic finance philosophy, the finality of the investment overrides the legal and financial dressing.
One can only note that the new emergence of interest concerning Islamic finance had as a consequence that, in certain countries, specific legislations and regulations have been put in place, while, in other cases, the legislator modified certain rules in order to allow the use of such mechanisms.
Thus, in France, the Parliament adopted a law authorizing the issuance of Islamic bonds, actually known under the name of Sukuk.
In addition, in England, the Islamic banks are authorized, since 2004, to grant loans free of interest; in the same year, the first Islamic bank opened its doors.
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Richard Gürlich attorney at law
Politických veznu 19, 110 00 Prague, Czech republic Phone No: +420222101591 Fax No: +420222101590 Email: info@akrg.cz Website: www.akrg.cz
ABOUT GÜRLICH & CO
The law office GÜRLICH & Co was founded on 1st February 2002. All members of the firm are experienced lawyers possessing outstanding professional expertise in various branches of law.
Currently, the firm consists of many lawyers who are supported by a qualified office staff. Besides, on a case to case basis, we would invite for cooperation many other external specialists and free-lance lawyers. This law firm is fully capable of offering legal services to both individuals and legal entities in almost all fields of civil and commercial law, all over the territory
of the Czech Republic. We are capable of providing legal services in the Czech and English languages.
In the event of cross-border transactions and litigation, this office hires its cooperating international law offices as well as external foreign lawyers. Still, this Law Firm remains a purely Czech legal office free of any financial or other influence exerted by foreign and/or local nationals. This allows the firm to provide its services in compliance with law, professionally and independently.
SCOPE OF LEGAL SERVICES: • Business Transactions
• Civil Law • Intellectual Property • Corporate Law and Business Law • Public Procurement • Labour Law • Real Estate • Litigation
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